Effingham County commissioners voted 3-2 to levy a 2-percent local excise tax on energy used in manufacturing, replacing the tax that the state is phasing out in an effort to be more competitive.

County Administrator David Crawley told commissioners that “one of the county’s largest industries” told him that reinstating the tax locally would cost it from $360,000 to $540,000 a year.

Crawley declined to identify the business, saying he promised to keep its identity confidential.

The cities of Springfield and Rincon are considering a memorandum of understanding they would need to approve in order to accept a share of the tax, Crawley said.

“I think we need to implement it,” said Commissioner Reggie Loper. “I don’t think we can make it without it. We can always change it later on.”

Voting for the measure at the Nov. 20 meeting were Loper and Commissioners Bob Brantley and Steve Mason. Commissioners Vera Jones and Phil Kieffer voted against it. Chairman Dusty Zeigler was absent.

Kieffer noted that commissioners had received an email from a group that represents businesses and opposes reinstatement of the tax.

“It’s not a new tax,” Mason said.

“It’s whether we want to extend that competitive edge,” Kieffer said.

Georgia was one of the few states to levy the sales tax on energy used in manufacturing. Gov. Nathan Deal has said the tax hindered the attraction of new business.

Loper said the Industrial Development Authority (IDA) can give incentives for a company to come here. “We don’t want to run anything off on account of it,” he said. “This is a tax we already have,” Loper said. “It’s just changing the way we get it.”

Crawley said commissioners can always rescind the ordinance later if they change their minds.

No one spoke at the public hearing on the issue, which commissioners held during the meeting. The 3-2 vote was on first reading. Second and final reading is scheduled for Dec. 11.

John Henry, chief executive officer of the Effingham County IDA, said he sees both sides of the issue and is glad he didn’t have to decide.

He said the county’s decision to enact the 2-percent tax will be more painful for existing businesses that were hoping for more of a tax break than it will be for new businesses that are considering coming to the county.

Businesses looking to open a new facility consider a number of factors such as land, labor and transportation costs, he said. Effingham’s proximity to the Savannah port remains a valuable draw.

“We’re not a proponent of any new taxes,” Henry said. “We would have preferred not to have it. But that’s a big loss to the county revenues.”

Previously, the state charged a 7-percent sales tax on energy used in manufacturing. Of that 7 percent, 4 percent went to the state, 2 percent went to the county and 1 percent went to the county for education.

State lawmakers kept the 1-percent tax for education. They are phasing out the 4-percent that went to the state and they allowed local governments to decide if they want to levy the remaining 2 percent.

Back taxes

In other action on Nov. 20, commissioners voted 4-1 to waive $3,900 in penalties and interest on overdue property taxes for Born Again Tabernacle.

The church still must pay $3,700 in back taxes on a half-acre that has a 1,000-square-foot, one-bathroom house, which it wants to use as a parsonage.

The church, which has about 20 members, was given the property on May 31. The Rev. Reginald Roberts said the church will try to pay the back taxes on a payment plan.

Kieffer voted against the release of penalties and interest and Zeigler was absent.

Kieffer said he was concerned that since the commissioners were not using specific parameters to make their decision, they can’t ensure that they are being fair each time they are presented with such requests. He also was concerned about the burden that waiving such penalties and interest places on other property owners.

Samuel Smalls owned the property and didn’t pay taxes from 1998 to 2008. The property was then deeded to Michael Garvin, the mayor of Guyton. He didn’t pay taxes from 2009 to 2011.

County staff said whoever owns the property as of Jan. 1 is responsible for the taxes, including back taxes, penalties and interest.

Tax Commissioner Linda McDaniel said the church was caught in a “perfect storm” — that multiple mistakes led to the church being in the position it’s in.

The church was given the wrong piece of property a few years ago — a vacant piece of land instead of the land with the small house on it. If the church had been given the correct property in the first place, it could have used the building as a parsonage and the taxes wouldn’t have accrued because churches are tax exempt.

Also, the house was put up for sale during a tax sale to collect back taxes years ago, but no one bought it.

Mason said if the commissioners didn’t waive the penalties and interest and the church couldn’t pay that amount along with the back taxes, the house would wind up in another tax sale and once again might not sell.